API InsurTech startup Lula plans to aggressively hire and expand its product capacity now that it has raised $18 million in new venture capital.
The company started out as a car sharing app for college students, Now, Lula is an API (application programming interface) outfit that provides companies of all sizes with their insurance infrastructure, including car rental companies, trucking and logistic companies, car sharing platforms, rentals for military personnel, and everything in between. Its technology helps customers manage their insurance programs, and it works with various insurance providers to make episodic insurance available, according to a Lula spokesperson.
Lula’s technology includes tools such as customer vetting, fraud detection, driver history checks, and policy management and claims handling through is insurance partners. Lula said it is known as “the Stripe for Insurance.”
“We realized companies wanted to vet their customers, insure their vehicles on a per use basis, and manage claims, but didn’t have the resources to do so,” Co-Founder & President, Michael Vega-Sanz said in prepared remarks. “We decided to repurpose our technology while leveraging our insurance partners to provide those resources, and in the way Stripe provides companies with their payment infrastructure, Lula would provide their insurance infrastructure via our API.”
Founders Fund, and Khosla Ventures led the Series A round, though SoftBank, Bill Ackman, and previous investors Nextview Ventures, Florida Funders, and more also participated. Lula said its investors also include a number of insurance, and logistics groups such as Flexport.
Founders Michael Vega-Sanz and twin brother Matthew Vega-Sanz plan to use the funding to fulfill the demand of nearly 2,000 companies on its waiting list and to hire aggressively, the company noted. A 15-person team is currently based at the company’s South Miami headquarters, with plans to triple that size by the end of 2021.
From Dorm Room to Ful-Fledged Startup
Lula said it initially began as a car sharing app for college students, known as Lula Rides, out of Michael Vega-Sanz’s Babson College dorm room. It expanded to more than 500 campuses in all 50 states, and claims to be the first company to let 18-year-olds rent cars without restrictions. The duo dropped out of college, and moved back to Miami prior to the pandemic, according to the company. When college campuses closed, they decided to repurpose the software to launch Lula 2.0.
Lula formally launched in August 2020, working with car rental, and car sharing companies. By November, growth had exploded, and Lula claims to have had its first profitable month. By April, Lula announced its technology would be available for the trucking industry, and had more than 1,600 companies sign up for its waiting list in 4 days, the company said. With investors making their way to South Florida for Miami Tech Week, and the company’s rapid growth, Lula began receiving requests to meet and ultimately decided it was time to raise its Series A, the company noted.
“When we moved back from Boston to build Lula here, everybody told us a generational company couldn’t be built in Miami”, Lula CEO & Co-Founder Matthew Vega-Sanz said in prepared remarks. “It’s surreal to raise a round of this size, and to be building something that will revolutionize what is arguably the most important industry in our economy, but even more surreal is the thought that our story may inspire others in the Hispanic community to explore opportunities in tech.”
The brothers are sons of Puerto Rican, and Cuban immigrants, and grew up on a small South Florida farm, according to the company. Before launching the app at Babson, the brothers studied at Miami Dade College. During this time, they worked as farm hands, and selling women’s shoes at Nordstrom.
“We started at a community college, didn’t attend a top technology school, and spent our childhood on a farm, away from computers,” Matthew Vega-Sanz said. “Our hope is people hear our story, and realize how attainable this all is regardless- of your background.”
Lula is gearing up to expand in a market where startups and tech companies based in part on API technology are becoming more commonplace, though execution details differ. They include EIS, which recently secured a $100 million investment from private equity firm TPG to help it accelerate product development across multiple product lines. The company’s cloud-based platform includes thousands of APIs designed to help insurers in all lines of business either freely connect to or serve as a hub for a large amount of InsurTech and emerging technologies.